Duron to be acquired by Sherwin-Williams

Mixing paint to achieve that nice greenback green

May 19, 2004|By William Patalon III | William Patalon III,SUN STAFF

Sherwin-Williams Co., the nation's largest paint retailer, has agreed to buy its Beltsville-based rival, Duron Co., for $253 million in cash and other considerations, in a deal both parties say cements the future of a local company founded more than 50 years ago by an entrepreneur who got his start selling paint from the trunk of his car.

Privately held Duron, which makes paints and industrial coatings and sells through its chain of 231 stores from New Jersey to Florida, is the No. 3 U.S. paint retailer. It makes its wares in plants in Beltsville and Atlanta. It has annual sales of about $350 million and about 1,700 employees.

Cleveland-based Sherwin-Williams, which is publicly held, reported sales of $5.41 billion last year. It had 2,691 stores at the close of the first quarter.

Sherwin-Williams said the sale won't be final for at least 30 days, pending an antitrust review.

Duron "is an outstanding company, does an outstanding business and is extremely well-managed," said Bob Wells, Sherwin-Williams' vice president of corporate planning and communications. "We've always admired them from the other side as a competitor and have [long] managed to remain in contact with the management of the company. And the timing was right."

In a statement, Sherwin-Williams said the acquisition would allow it to expand its business with builders, contractors and property managers. About 95 percent of Duron's business is with the professional market.

Wells and Gary Saiter, Duron's marketing chief, said that Sherwin-Williams plans to pretty much operate the local company as is. It expects to keep Duron's stores open and to retain all of Duron's employees.

"The reason they are buying this business ... is to keep it intact," said Saiter, Duron's director of marketing and electronic commerce. "This is a very specialized niche and is extremely [competitive]. For them to really grow their market share, they have to keep this company intact."

The deal might allow Duron to grow more than it could have as an independent company in a fragmented market. Analysts said Sherwin-Williams wants to have 3,000 stores by the end of this decade and might have a long-term target of 4,000 retail outlets.

"This is one of those deals where two plus two equals five," said Eugene Fram, a marketing professor with the Rochester Institute of Technology. "What you see here is a company that's working to become more vertically integrated. There are probably some opportunities for limited cost-cutting within Duron and some potential for additional market penetration. Hopefully, the [combined] company will become more profitable in the long run than it otherwise might have been."

Duron was founded in 1949 by Harry Feinberg, father of Robert Feinberg, the company's current chairman and chief executive officer.

At first, Feinberg was the company's only salesman. To get contractors to try his product, he drove to job sites and pulled a gallon of paint from the trunk of his car, offering it free to a contractor in return for the promise to give the new product a try, Saiter said.

A year later, after lining up dealers in five states but frustrated that he couldn't find anyone to carry the product in Duron's home market of Washington, the senior Feinberg decided to open a store - the company's first - which he called Metropolitan Paint Co.

The Beltsville plant opened in 1957. Duron's paints have bedecked walls at Walt Disney World, MGM Studios, the Pentagon and the White House.

Robert Feinberg, now 64, acceded to his father's wishes and joined the company in 1976, abandoning a career as a professor of organic chemistry at Rockefeller University.

With no present family interest in taking Duron's reins, Feinberg thought the best way to preserve the company and its workers' jobs was to sell to a company with a long-term view and a penchant for growth, said Duron's Saiter

"We feel that this is a great opportunity for Duron," he said. "It's also a good opportunity for Sherwin-Williams."